The effective implementation of trade facilitation measures will help to lower transaction costs and improve the capacity of traders to supply competitive goods and services in global markets, giving due consideration to varying levels of development in countries along the supply chain and, consequently, to varying levels of implementation of transport, information and communication technologies. The institutional agenda of trade facilitation has a history: its roots date back some 50 years or more and was designed with trading requirements of a few countries in mind. Thus, currently available standards and recommendations for harmonizing and simplifying the steps involved in trade
transactions have been developed mainly through regional institutions grouping developed countries. Once developed and agreed, these standards have then been productively implemented in these countries. A widespread view is that standards solutions spawned and successfully applied in industrialized countries could bring similar benefits if transferred as such into developing countries.

However, practical experience does not seem to support this view. Experience gained through technical assistance in the field shows that imported blueprints rarely fit all kinds of environments. Different situations require different approaches, both in terms of resources and pace. Country or region-specific institutional innovations have proved successful when they can be based on local knowledge and experimentation, targeted to domestic traders and tailored to domestic institutional realities.

On the other hand, trade facilitation can actually contribute to a nation’s development, and its benefits should not be limited to a given sector. The occurrence of this broader impact depends to a large extent on the ability of trade facilitation programmes to construct an institutional and managerial international trade capacity, which could sustain global approaches to trade practices, and consequently avoid an ever-increasing proliferation of widely varying requirements based on national rules and regulations or even on company based procedures.

I would like to review some of the most relevant global aspects that should be addressed in the formulation and implementation of trade and transport facilitation programmes. These include general implementation issues, focused supply chain solutions, the impact of security measures and finally some thoughts on cooperative mechanisms in trade facilitation.

Implementation issues
As I said, most of the basic solutions to overcoming known obstacles to the conclusion of trade transactions have already been developed over the past half-century. A number of intergovernmental organizations have established international instruments, standards or benchmarks aimed at simplifying documentation and information for exportation and importation, including the United Nations Economic Commission for Europe (UNECE) (e.g. the UN Layout Key for Trade Documents), the World Customs Organization (WCO) (e.g. the revised Kyoto Convention) and UNCTAD (e.g. the UNCTAD/ICC Rules on Multimodal Transport Documents). However, for various reasons these different initiatives have not been universally adopted and trade and transport procedures remain cumbersome and costly in many developing countries. The reasons for this undesirable situation may be found in an aggregate of circumstances that can be reduced to two words: information and environment.

Information is significant because a document is nothing but a “vehicle” for trade and transport data, and procedure encompasses information retrieval, storage, processing and transmittal. Therefore, trade facilitation, which is aimed at simplifying international trade documentation and procedures, is in essence an information system activity. What used to be a manual activity can now be easily improved by readily available information and communication technologies (ICT).

Trade facilitation is also an environment-related discipline: it cannot be successful if certain contextual elements are not present. The feasibility and success of the implementation of trade facilitation programmes depend on surrounding factors such as the quality of public administration human and institutional resources, the availability of international transport and logistics services, and of course readiness to effectively use ICT.

When both information technologies and an appropriate environment are available, trade facilitation becomes a success story. This has been the case in most developed and more advanced developing countries, where trade facilitation has led to simplification and better control. Information technologies and the required environment are now considered as major factors for successful implementation of trade facilitation programmes in developing countries. However, one should not believe that the introduction of ICT is in itself a sufficient condition to achieve greater efficiency. ICTs will be beneficial only if existing administrative and commercial practices are overhauled prior to the computerization of procedures. To address this issue, the WCO, for instance, provides extensive technical assistance to its members and has developed a Customs Reform and Modernization Programme (CRM). This programme is designed to assist Customs administrations in becoming more self-reliant through better use of resources, strengthening of management capabilities, and designing appropriate and efficient Customs processes and procedures. It is only then that automated systems such as ASYCUDA can be successfully introduced and create an environment where new tasks, including risk management and security-related activities, can be successfully tackled.

Towards focused solutions: the supply chain
management approach
Although international trade transactions have common features, considerable differences appear when distribution chains and marketing channels are looked at from the perspective of a specific product. Here again the environment (basically, services and infrastructure) has a great impact on the speed, cost and predictability with which trade operations are actually completed. In other words, the efficiency of trade operations depends largely on the overall efficiency of the framework within which they are undertaken. Port productivity depends as much on the skill of the labour as this skill depends on the cultural context, social background, nutrition, climatic conditions and other factors that all affect the learning capacity of the workers.

For instance, car assembly lines in developing countries manage to operate with a one-day stock and organize just-in-time delivery of relevant inputs and parts coming from several distant origins, including local suppliers. They make extensive use of advance programming, ordering and product-tracking techniques. Port operations productivity in Malaysia and Panama has reached levels equivalent to those in the most modern and best-run harbours of the developed world. In Brazil, bulk unit train operations rank among the most cost-efficient, and intermodal operations for iron ore exports can be considered to represent best practices on a global basis.

What, then, is the recipe for success in building an efficient operation? An intermodal transport system will not necessarily attain its optimal productivity when each and all of its segments are working at full drive, but rather when these segments adapt their operations to one another. This supply chain management approach, where different worlds meet and adjust to each other, thus becomes a model for a trade facilitation puzzle where different pieces have to fit together in order to complete the picture.

Television sets produced in Korea and sold in the European Union do not follow the same path — do not make use of the same trading channels — as do jute bags produced in Bangladesh or bananas exported from Cameroon to Canada. Trading channels may also be different for different types of Bangladeshi jute bags, or they may differ when destination markets are different. At the same time, when stuffed into a container, all these different products, from different origins and manufacturing processes, end up being loaded and carried on the same ship and unloaded at a given port of destination or transit. Some support infrastructure, equipment and services are common to all of them.

In each case, the systemic, end-to-end perspective provided by the supply chain management approach may help design and adjust trade facilitation solutions to suit the general requirements and specific needs of trading channels related to specific products’ trade transactions.

Logistics, transport services and infrastructure
Transport plays a major role in the logistics and service quality of the supply chains. It has to meet increasing quality requirements in terms of flexibility, speed and reliability in order to deliver the goods at a precise time and place. Taking into account the complex interaction of sourcing, suppliers, manufacturers, retailers and consumers, multimodal transport is emerging as a solution for tailoring transport systems to the logistic needs of the end user. It allows the integration of a broad range of transport services in the supply chains, supported by well-functioning ICT. This integration can easily provide pre- and on-carriage information exchange as well as advanced services, such as real-time information, that accelerate the information flow, make it more reliable and
enhance service quality.

The successful development of efficient transport services depends not only on basic transport infrastructure, but, more importantly, on the establishment of effective mechanisms that warrant the most effi cient use of available infrastructure. The problem in many countries is that regulation, planning and management of the different elements of trade-supporting infrastructure are highly disjointed and without effective coordination. Laws and regulations governing the conduct of trade and the organization of trade-supporting services and infrastructure are often outdated. There is thus a need to develop modern policies and administrative arrangements that bridge institutional as well as organizational disparities and inconsistencies. In this context the lack of globally accepted multimodal transport rules is the most important case that needs urgent remedy.

The diversity of legal and regulatory constraints encountered at local and national levels of government creates substantial confusion, unnecessary delays and cost, and pressure on governments to adhere to international standards and practices. A special challenge for a country is therefore to design regulatory provisions and organizational arrangements that will yield optimal use of existing physical network structures, gradually shifting government’s role to being a promoter rather than a manager of trade-supporting infrastructure and services.

The distribution of responsibilities in transport activities between the public and private sectors requires a clear definition of the public sector’s mandate and of its relationships with private partners, with a view to fostering private-sector-led investment, capacity development, and operational efficiency. This implies a comprehensive understanding of the interests at stake, so that public and private partners can be in a position to provide each other with the services they are the best placed to deliver: an efficient and clear regulatory environment, a basic set of well-integrated infrastructure networks for the public sector and a cost-effective transport services system for the private sector.

E-commerce
International trade and transport would significantly benefit from the opportunities offered by electronic commerce in general and electronic documents in particular. The time and expense incurred in processing numerous documents, delay occurred in waiting for the arrival of the bill of lading at the port of discharge, the costs and liabilities arising from delivery of goods without production of the original bill of lading or delivery against “letters of indemnity” are examples of some of the problems which can be avoided by transition into an electronic environment. This is particularly important for those traders who need to get their products to foreign markets under “just in time” conditions. It is observed, however, that negotiable bills of lading continue to be required documents also in transactions where their characteristic as a document of title is not necessarily needed. The increasing use of electronic non-negotiable documents is an important element of competitiveness of traders in developed countries. It would be desirable that a similar environment be created in developing countries that would allow for the use of non-negotiable documents in those cases where negotiability is not of essence.

Trade facilitation and security
The terrorist attacks on 11 September 2001 illustrated the critical yet fragile nature of the international transport system. For the global economy to flourish, this system must continue to provide safe, secure, efficient, and reliable services to travellers and customers in all parts of the world. At the 2002 G8 Summit in Canada, heads of state agreed on a set of cooperative actions to promote greater security of land, sea and air transport while facilitating the cost-effective and effi ient flow of people, cargo and vehicles for legitimate economic and social purposes.

Such security concerns may have both immediate and long-term implications for several operational aspects of international trade transactions. Unilateral action taken by the United States includes three major initiatives, i.e. the Customs–Trade Partnership Against Terrorism (C-TPAT), the Container Security Initiative (CSI) and the 24-hour rule on manifests. These initiatives definitely have an impact on traders and transport service suppliers in trades with the US. Furthermore, it can be clearly established that this impact is proportionally greater for developing than for developed countries.

The CSI can be expected to have a major impact on the geographical distribution and concentration of flows to the US. Today, all the 20 so-called major ports have joined the CSI initiative and it will have to be seen how secondary ports can be integrated into the scheme in a second wave. Investment in non-intrusive inspection equipment can be a considerable burden for smaller ports, even though it appears that potential requirements are often overstated. The port of Rotterdam, for instance, one of the major ports of the world handling some 6.5 mio TEUs per year, has one fixed scanner. In the whole of Germany, a major trading partner of the US, there are one fixed and 6 mobile scanners. The so-called 24 Hours Rule (presentation of Vessel Cargo Declaration to Customs Before Cargo is Laden Aboard Vessel at Foreign Port for Transport to the United States) requires detailed manifest information in relation to U.S. bound cargo to be provided 24 hours

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